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(Circulated
by authority of Senator the Honourable Nick Minchin,
Minister for Industry, Science and
Resources)
ISBN: 0642 404372
TRADEX SCHEME BILL
1999
TRADEX DUTY IMPOSITION BILL
1999
CONTENTS
TRADEX SCHEME BILL
1999
TRADEX
DUTY IMPOSITION BILL 1999
The Tradex Scheme is a key initiative arising from the
Government’s Investing for Growth industry statement. The
objective of the Tradex Scheme is to allow for the importation of goods, without
payment of customs duty or other taxes, provided the goods are subsequently
exported or incorporated in other goods that are
exported.
The Tradex Scheme Bill 1999
and the Tradex Duty Imposition Bill 1999 together with the Customs
Tariff Amendment (Tradex) Bill 1999 provide the legislative basis for the
new scheme.
The Tradex Scheme Bill 1999
establishes the Tradex Scheme and provides for the administration of the
program.
The Tradex Duty Imposition Bill
1999 provides for circumstances where goods entered under the provisions of
the Tradex Scheme are not exported or are consumed or used in the Australian
domestic market. In particular, this Bill provides for the imposition of Tradex
Duty - an amount equal to the customs duty that would have been payable if the
goods had not been imported under the provisions of the Tradex
Scheme.
The Customs Tariff Amendment (Tradex)
Bill 1999 inserts a new item into Schedule 4 to the Customs Tariff Act
1995. This will allow for the importation, without payment of customs duty,
of goods included in a “tradex order” under the Tradex Scheme, where
those goods are imported by the holder of the
order.
The Tradex Scheme will replace the
existing Tariff Export Concession (TEXCO) Scheme and allow most Duty Drawback
users to gain up-front exemption from customs duty and other taxes on goods
imported for re-export either in their original or modified form.
The financial impact of the introduction of Tradex is
difficult to estimate accurately. The cost of revenue forgone will be highly
dependent of the level of utilisation of the Tradex
Scheme.
Analysis of unpublished data provided
by the Australian Bureau of Statistics has indicated that the utilisation rate
of the existing TEXCO and Duty Drawback Schemes is currently running at
approximately 50 per cent. This suggests that approximately $100 million of
eligible claims are currently being forgone by the exporting community. This
figure provides an estimate of the amount of additional revenue forgone as a
result of a 100 per cent utilisation of the existing schemes. With the
introduction of Tradex, it is expected the utilisation rate will increase
because of the more streamlined processes associated with the scheme. However,
the take-up rate is difficult to predict in an environment of low and declining
tariffs where small claims may not be cost effective for business.
Forward estimates make provision for an
additional $30 million a year (revenue forgone) as a result of the introduction
of the Tradex Scheme.
It has long been international practice to allow exemption from Customs duty and sales tax for goods that are imported and later re-exported, either in their original form or in a processed form. The international rules governing drawback are set out in the International Convention on the Simplification and Harmonisation of Customs Procedures (the Kyoto Convention). Australia’s Tariff Export Concession Scheme (TEXCO) and Duty Drawback schemes are consistent with the convention and are broadly similar to those operated by many other countries.
Duty drawback involves repayment of import duty, excise duty and/or sales tax on imported goods that are exported in the same condition or that are exported after being processed. TEXCO allows importation free of duty and/or sales tax but is limited to goods that are intended for export after being processed or incorporated in other goods.
A review of TEXCO, duty drawback and temporary importation provisions was undertaken by a Taskforce of Officials during the latter half of 1997 as part of the Commonwealth Legislation Review Schedule. The aim of the Commonwealth Legislation Review process is to examine the case for retaining, modifying or reforming current regulatory arrangements. The guiding principle is that legislation should not restrict competition unless it can be demonstrated that the benefits of the restriction to the community as a whole outweighs the cost, and the benefits of the legislation can only be achieved by restricting competition.
The Taskforce concluded that the programs under review generally facilitated competition rather than restricted it. While the Taskforce was not able to quantify the net public benefit of the schemes, evidence suggested that there were significant positive net benefits associated with the programs and these benefits were widely dispersed. The direct economic costs involved were mostly restricted to administration and compliance while the indirect economic costs were considered to be relatively minor. The Taskforce received evidence that lack of access to schemes such as TEXCO and drawback would make a broad range of Australian exports less competitive on world markets. On balance, the Taskforce concluded that the net economic benefit to Australia of TEXCO and duty drawback was likely to be significantly positive.
The Taskforce report recommended the retention of the main elements of duty drawback, TEXCO and temporary importation provisions on the basis that they provide compensation for a government induced market imperfection caused by the tariff regime and indirect tax system. The existing TEXCO and duty drawback schemes provide relief for exporters from import duties and sales tax with the key rationale for these schemes being the destination principle of taxation law. That is, taxes should only be levied on goods sold into the domestic market for home consumption. Goods which enter a country and which are subsequently re-exported without entering home consumption should generally not, according to the destination principle, be subject to taxes in that country - they should instead be taxed in the country in which they are finally consumed.
The Taskforce made a number of recommendations designed to improve the efficiency and effectiveness of the programs. The Taskforce noted that the utilisation of the present programs was estimated to be running as low as 50 per cent and that this amounted to approximately $100 million in customs duty and sales tax being collected which could have been claimed by the exporting community. The Taskforce suggested that much of the unclaimed entitlement reflected high access and compliance costs and outdated regulatory arrangements.
The deliberations of the Review Taskforce and the recommendations included in the draft report formed the basis of the Government’s Tradex initiative announced in the Prime Minister’s Investing for Growth industry statement of 8 December 1997.
The key features of the Tradex scheme, as announced in Investing for Growth, were as follows:
• Tradex will provide relief from customs duty and sales tax on imported goods intended for re-export or used as inputs to exports.
• The existing Duty Drawback and TEXCO arrangements will be integrated into a single, simplified and more accessible scheme.
• Tradex will improve the effectiveness of existing arrangements by:
§ moving to an exemption based system, thereby reducing compliance costs for users. A drawback facility will still be available for instances where, at the time of import, it was not known that the goods would be re-exported or used as inputs to exports;
§ adopting a more light handed approach to access and compliance requirements, and stronger reliance on self assessment in its day to day operation; and
§ relaxing some regulatory arrangements in relation to eligibility, registration and on going compliance requirements.
This Regulation Impact Statement has been prepared within the context of the Tradex Scheme having been announced as Government policy.
In essence the problem to be addressed is the low utilisation rates, high compliance and administrative costs associated with the current schemes. It has been estimated that the current levels of utilisation of these schemes is approximately 50 per cent. This equates to over $100 million in customs duty and sales tax that is unclaimed by Australian exporters with the consequential detrimental impact on their international competitiveness.
Under present arrangements, imported goods incur a duty liability when they are landed in Australia, and before being used in the manufacturing process prior to export or re-exported in the same condition at a later time. In circumstances where the goods are re-exported the producer uses duty-drawback provisions to claim the import duty and sales tax back. These arrangements for handling temporary imports represent a cost and burden for domestic manufacturers who use imports in their exported production.
Apart from the administrative work required to claim back the duty paid after the goods have been exported, firms also suffer a cash-flow cost. The capital funds that are tied up in the duty payment are not available for productive investment, therefore the potential return on investment is foregone.
Exporters who undertake industrial processing of imports prior to export may be eligible for up-front exemption from import duties and wholesale sales tax under the TEXCO scheme. However, the TEXCO scheme makes no allowance for imports that are exported in the same condition or that do not fulfil the ‘industrial processing’ requirement.
The Government’s overall policy objective is to put
in place a more competitive customs regime in order to facilitate additional
economic activity and help generate employment. A specific element of this is
implementing programs that facilitate export activities by streamlining the
administration of the customs regime applying to imports which are used in
exported goods or exported in the same condition. Specifically, the objective
of the introduction of Tradex is to increase utilisation of up-front exemption,
reduce compliance costs and minimise administration costs.
The options examined in this section use the Government’s announcement of the Tradex scheme as the starting point and focus on the alternatives available to meet the Government’s objectives outlined above.
Status quo
The continuation of the existing TEXCO, drawback and temporary importation provisions does provide exporters with an avenue to recoup customs duties and sales tax paid on goods that are exported. However, the recent review, while fully supporting the rationale behind the schemes highlighted the low participation rates and high compliance and administrative costs associated with them. The Government’s announcement of the Tradex initiative removes this approach as a feasible option.
One completely integrated scheme
The Government’s Tradex initiative could be achieved with the introduction of a complete redrafting of all the legislation and regulations associated with the three programs and their integration into one stand-alone Act. On close inspection the replacement legislation would largely mirror the existing provisions with minor amendments. There are three distinct streams of clients for the existing schemes. That is, those exporters who import inputs that are used in an industrial process currently have access to TEXCO; those exporters who do not meet the industrial processing requirements of TEXCO have access to duty drawback; and those people who import goods under prescribed conditions via the Temporary Importation Provisions (Sections 162 and 162A of the Customs Act 1901) and subject to international agreements.
Expansion of the administered TEXCO scheme to accommodate non-processed exports
The key feature of the Tradex initiative is to provide exporters with an up-front exemption from customs duty and sales tax. In other words, one option is to broaden the availability of the exemption features of the current TEXCO scheme so that exporters who do not undertake industrial processing can also participate. This option would involve amending the wording of Item 21 of the Fourth Schedule of the Customs Tariff Act 1995 (and associated By-Law) to remove the condition that goods must under go an industrial process and allow for goods to be imported and re-exported in the same condition or after incorporation into other goods. This approach would require very limited legislative change and result in a significant expansion in the number of registered users of TEXCO. TEXCO, however, is an administered scheme and there is some uncertainty as to whether the program administrators have sufficient legal powers to ensure the recovery duty and sales tax liabilities and general compliance with the conditions of the scheme.
Introduction of a legislated scheme to provide up-front exemption component of Tradex, continuation of drawback and Temporary Importation Provisions (with amendments)
This option is broadly the same as the option above in relation to the mechanism used to provide up-front exemption. That is, the amendment of Item 21 or the introduction of a new item to the Fourth Schedule to the Customs Tariff Act 1995 (and associated By-Law). However, this option also provides Tradex with a legislative basis that will provide a number of benefits to both users of the scheme as well as administrators.
In particular, the legislation for Tradex will:
• Clearly spell out eligibility criteria so that potential applicants have a degree of certainty as to the conditions they must meet in order to participate in the scheme;
• Enable unsuccessful applicants to have a right of review of the relevant adverse decision by the Administrative Appeals Tribunal;
• Provide the administrators of the scheme with the appropriate audit and recovery powers and penalty provisions to help ensure compliance.
A drawback facility will still be available for instances where, at the time of import, it was not known that the goods would be re-exported or used as inputs to exports.
The
key objective of the Tradex scheme is to provide exporters with up-front
exemption from Customs duties and sales tax on imported inputs and thus largely
remove the need to drawback these charges after export. This approach will
result in substantially lower compliance costs for industry and lower processing
costs for Government as a result of greater use of self-assessment and risk
management strategies. These lower compliance costs along with a targeted
publicity/education program should make the Tradex scheme more attractive to
business and result in higher utilisation rates. This in turn will improve the
international competitiveness of Australian
exporters.
The movement to an exemption based
program would result in substantial gains to current and potential duty drawback
users as well as reducing administration costs by removing the implicit
“double handling” involved in a drawback type
system.
Evidence provided to the Taskforce
Review suggested that business compliance costs in relation to duty drawback are
in the order of 10 to 15 per cent of the amount refunded. Using 1997-98 as a
base year when approximately $80 million of drawback payments were made,
business compliance costs could equate to approximately $8 - $12
million.
In addition, evidence presented to the
Taskforce suggested that an exemption based program (in this case the current
TEXCO scheme) was significantly cheaper to administer than the existing drawback
process. For example, the average drawback claim costs around $49 to process
while the cost of a TEXCO exemption per import entry line is only around $9.
Wider use of an exemption based system would drop the average cost down towards
the TEXCO level.
The introduction of the Tradex
scheme and a resultant increase in the utilisation rate by business would also
have implications for Government revenue or more particularly “revenue
forgone”. As mentioned earlier, the imposition of Australia’s
import duties and sales taxes are based on the destination principle, that is,
they are levied only on goods sold into the domestic market. Goods exported are
exempt from such taxes. Thus exporters paying duty and sales tax on goods
imported and subsequently exported are entitled to relief from those taxes.
Using this as the starting point, drawback can be regarded as an entitlement
rather than as a concession or form of assistance. Duty forgone can be largely
seen as irrelevant in this instance because the duties and sales tax are subject
to drawback. In this sense, it was never Government revenue to forgo.
Therefore, the difference between the amount of duty actually claimed and the
amount which exporters were entitled to claim could be seen as a windfall gain
to the Government at the expense of non-claiming exporters and importers. This
unclaimed entitlement has a negative impact on the international competitiveness
of Australian exporters.
There are also some
indirect economic costs in terms of resource allocation in the economy. In
theory by conferring an advantage on firms best able to take advantage of the
Tradex scheme, resources will be encouraged into those activities and existing
users of TEXCO and drawback will be better able to retain resources than would
be the case in the absence of the schemes. However, in an environment of
generally low or declining tariffs across most imported goods, these resource
allocation costs are unlikely to be high. In addition, it is mainly
internationally competitive exporters who gain from the existing schemes (and
Tradex in the future) and this further ameliorates resource
distortions.
All of the options outlined in the
previous section (excluding the status quo) would have broadly the same impact
on both business and government. That is, the introduction of an
exemption-based scheme would be more attractive to business by lowering of
compliance costs (with resultant increase in utilisation rates) as well as
reducing administration costs for government.
A
summary of the impacts of each option is presented below.
There
were two distinct phases of consultation. The first being the review of the
existing TEXCO, duty drawback and temporary importation provisions undertaken by
a Taskforce of Officials during the latter half of 1997 (as part of the
Commonwealth Legislation Review Schedule). The Taskforce was chaired by the
then Department of Industry, Science and Tourism. Other agencies represented
were Treasury, the Department of Foreign Affairs & Trade, the Australian
Customs Service and the Australian Tax
Office.
The Taskforce approach to the
Review involved:
• the preparation of a discussion paper to guide
interested parties wishing to make a submission to the
Review;
• the placement of an
advertisement in "The Australian" and "The Australian Financial Review" inviting
public submissions to the Review;
• the
consideration of 35 written submissions from interested parties including
importers, exporters and customs
brokers;
• follow up consultations with
16 parties that made submissions;
and
• the preparation of a report
evaluating the programs, incorporating stakeholder comments and suggestions and
the drafting of recommendations concerning the programs under review.
A significant outcome from the public consultation
process was a general agreement on the need to retain the key elements of the
current programs with modifications and streamlining. In addition, many
stakeholders advocated a greater availability of the up-front exemption based
system available in TEXCO rather than the more cumbersome drawback arrangements.
The Taskforce considered these views and largely reached the same
conclusion.
The Taskforce draft report formed the basis for the for
the Government’s announcement of the Tradex scheme as part of the
Investing for Growth industry
statement.
The second phase of consultations
involved discussions between the Department of Industry Science and Resources
and the Australian Customs Service on the best mechanism for the implementation
of the Tradex initiative. During this time various stakeholders (importers,
exporters and customs brokers) were consulted prior to finalisation of the
initiative.
With the exception of the Status Quo, all of the options proposed would provide the benefits of an up-front exemption system for industry involved in the importation of inputs or goods prior to their ultimate export. However, the recommended option for the introduction of the Tradex initiative is via legislation. This option provides both industry and Government with significant benefits in the delivery of an up-front exemption scheme. In particular, legislation for the implementation of Tradex will:
• clearly spell out eligibility criteria so that potential applicants have a degree of certainty as to the conditions they must meet in order to participate in the scheme;
• enable unsuccessful applicants to have a right of review of the relevant adverse decision by the Administrative Appeals Tribunal;
• provide the administrators of the scheme with the
appropriate audit and recovery powers and penalty provisions to help ensure
compliance given the self-assessment nature of the scheme.
The Tradex initiative will be implemented via legislation
and amendments to various Customs Regulations. In particular, the Customs
Tariff Act 1995 will be amended to include a new item (item 21A) to allow
for the wider scope of the Tradex scheme. Legislation covering the
administration and operation of Tradex has been drafted and a number of issues
highlighted in the review will result in the amendment/removal of onerous or
redundant Customs regulations.
The Department
of Industry, Science and Resources in consultation with other relevant
government agencies will establish a targeted education/awareness program to
help promote utilisation of the Tradex scheme.
Periodic reviews will be undertaken to monitor
the performance of the scheme and detail the level of
utilisation.
The necessity for arrangements
such as Tradex will be formally reviewed after any significant changes in
Australian tariff policy.
This clause provides for the Bill, when enacted, to be
cited as the Tradex Scheme Act 1999.
This clause provides that the Act commences on a day to be
fixed by Proclamation.
This clause provides that the object of the Act is to
establish the Tradex Scheme, under which goods may be imported without the
payment of Customs duties and other taxes (that would normally apply on import)
provided that the goods are subsequently exported or incorporated in other goods
that are exported.
This clause provides definitions of certain terms
contained in the Act.
Subclause (1) outlines the Core Criteria that must be met
for a person to make an application for, or an application for a variation of, a
tradex order. Subclause (1) provides
that:
• the person intends to import
goods that are to be subsequently
exported;
• the requirements of the
Drawback Regulations under Section 168 of the Customs Act 1901 are
complied with or the goods are included in an exempt class (goods declared by
the regulations to be eligible for importation under a tradex order, but may not
comply with some or all of the of the Drawback
Regulations);
• the goods will be
exported within one year after importation (unless the Secretary allows an
extension of time);
• the person has
appropriate record-keeping and accounting systems to substantiate that the goods
imported were exported in line with the conditions of the
scheme.
Subclause (2) largely mirrors subclause
(1) but deals with the core criteria for the holding of a tradex
order.
This clause defines circumstances where the holder of a
tradex order may be disqualified from utilising the Tradex Scheme. Subclauses
(a) to (e) provide that disqualifying circumstances exist
if:
• the core criteria under clause 5
have not been complied with, except where the person became liable to pay and
paid tradex duty under clause 21;
or
• the person has provided information
or documents that the person knew, or ought to have known, to be false or
misleading; or
• the person was
ineligible to apply for or hold a tradex order;
or
• the person has failed to pay tradex
duty in accordance with clause 21.
This clause states that the Act does not extend to
external Territories.
This clause states that the Act does not bind the Crown in
any of its capacities.
This Part outlines the responsibility of the Secretary to
establish and maintain a Register of tradex orders.
This clause requires the Secretary to establish a Register
of tradex orders (containing particulars and in a form that the Secretary
considers appropriate). The Register may be kept in an electronic form. The
Secretary also has the responsibility to ensure that particulars contained in
the Register are altered when circumstances change or when the Secretary is made
aware that incorrect information is contained in the Register. The Secretary
must also provide the holder of a tradex order with details of the recorded
particulars.
The holder must notify the
Secretary in writing of changes to the recorded particulars within 14 days of
any change occurring.
This Part outlines the procedure for making an application
for a tradex order and the process that the Secretary must undertake when
making/refusing to make a tradex order.
Subclause (2) sets out the procedure for making an
application for a tradex order. In particular, the person must apply in writing
in accordance with the approved form. The application must specify the type of
goods to be imported under the tradex order and contain any information as
required by the approved form. The application must be signed and lodged with
the Secretary.
Subclause (3) allows the
Secretary to require the applicant to provide in writing information in relation
to:
• the proposed export activities that
would make the goods eligible for drawback when
exported;
• the measures to be taken to
ensure that the goods comply with drawback regulations (if not included in an
exempt class of goods);
• the
record-keeping or accounting systems in place to account for the goods prior to
export;
• any other information relevant
to the Secretary’s consideration of the application.
This clause sets out the process to be undertaken by the
Secretary when making/refusing to make a tradex
order.
Subclause (1) states the Secretary must
be satisfied that the core criteria are complied with (under clause 5) and that
the applicant is not ineligible to make an application. The Secretary needs to
be satisfied the person has not given the Secretary any information or a
document that the person knew, or ought to have known, to be false or
misleading, and has not failed to pay tradex duty in accordance with clause 21.
If satisfied of the above matters the Secretary must make an order allowing the
goods to be entered under item 21A of Schedule 4 to the Customs Tariff Act
1995.
Subclause (2) states the Secretary may
refuse an application (in whole or in part) if not satisfied under subclause
(1).
Subclause (3) requires the Secretary to
give written notice of his or her decision on a tradex application to the
applicant.
Subclause (4) states that if a
notice under subclause (3) has not been received by the applicant with 40 days
of lodgement of the application, the Secretary is taken to have refused the
application.
Subclause (5) states that the
notice refusing the application must set out the Secretary's findings on
material questions of fact, refer to the evidence or other material on which the
decision was based and give reasons for the decision. (A notice granting the
application must include the matters set out in subclause 7(c) (see
below)).
Subclause (6) states that the tradex
order must be in writing, be signed by the Secretary, and comes into effect on
the date stated in the order.
Subclause (7)
states that when the Secretary makes a tradex order, the Secretary is required
to allocate a distinguishing number to the order (the tradex number), record the
particulars and tradex number in the Register, and include in the notice given
under subclause 3 the tradex number, the goods covered by the order and the date
of effect of the order.
Subclause (8) states a
tradex order is not a statutory rule within the meaning of the Statutory
Rules Publication Act 1903.
This Part outlines the procedure for making a variation to
a tradex order and the process that the Secretary must undertake when granting
or refusing an application for variation of a tradex order.
This clause outlines the procedure for making an
application for variation of a tradex
order.
Subclause (2) allows for the addition
and/or deletion of goods specified in a tradex
order.
Subclause (3) states that the
application must be in writing and in accordance with the approved form. It
must state the tradex order number, set out the details of the proposed
variation and contain such other information as required by the form. The
application must be signed and lodged with the
Secretary.
Subclause (4) provides that the
Secretary may, by written notice, also require the applicant to provide in
writing any information that the Secretary considers relevant to consideration
of the application.
This clause provides for the process by which the
Secretary may grant or refuse an application for variation.
Subclause (1) states that if the application
is for, or includes a request for, the removal of goods from the tradex order,
and the Secretary is satisfied there are no disqualifying circumstances, the
Secretary must grant the application.
Subclause
(2) states that if the application is for, or includes a request for, the
inclusion of goods and the Secretary is satisfied that the core criteria are met
and there are no disqualifying circumstances, the Secretary must grant the
application.
Subclause (3) states the Secretary
may refuse an application (in whole or in part) in all other
circumstances.
Subclause (4) provides that the
Secretary must give written notice to the applicant of the Secretary’s
decision.
Subclause (5) states that if a notice
under subclause (4) has not been issued to the applicant within 40 days of
lodgement of the application for variation, the Secretary is taken to have
refused the application.
Subclause (6) states
that if the decision is to reject the application the Secretary must set out his
or her findings on material questions of fact, refer to the evidence or other
material on which the decision was based and give reasons for the
decision.
Subclause (7) states that if the
application is granted the Secretary must vary the tradex order to give effect
to the decision.
Subclause (8) states that the
variation of a tradex order must be in writing signed by the Secretary and comes
into effect on the date stated in the instrument of
variation.
Subclause (9) states that if the
order is varied the Secretary must alter the particulars in the Register, and
include in the notice given under subclause (4) the various matters mentioned in
subclause 9(b).
This Part outlines the procedures and processes to be
followed in the event that a tradex order is revoked or suspended by the
Secretary. This Part also specifies when a tradex order ceases to
exist.
This clause allows the holder of a tradex order to request
the Secretary to revoke the order.
Subclause
(2) states that for the order to be revoked the holder must make a request to
the Secretary in writing (on the approved form), state the tradex order number,
include all information required by the form, be signed by the holder and lodged
with the Secretary.
Subclause (1) provides that if the holder of a tradex
order becomes aware that they were ineligible to apply for, or have become
ineligible to hold, an order, the holder must give notice to the Secretary in
accordance with subclause (2) within 7
days.
Subclause (2) outlines the form and
matters that must be included in the written notice to the
Secretary.
This clause requires the Secretary to give the holder
written notice requesting the holder to show cause why a tradex order should not
be revoked if it appears to the Secretary that any circumstances that may be
disqualifying circumstances have occurred in relation to the holder. The
written notice provided to the holder must set out the particulars of the
circumstances and invite the holder (within 28 days) to provide evidence that
the circumstances do not exist, or if they do, that they are not disqualifying
circumstances.
Clause 16 does not apply where
the Secretary has received notice from the holder under clause
15.
This clause outlines the circumstances and procedures
whereby the Secretary may suspend a tradex
order.
Subclause (1) states that the Secretary
may suspend the order if a notice under clause 16 is issued and the Secretary
believes that disqualifying circumstances exist and considers it appropriate in
the circumstances to take such
action.
Subclause (2) states that the Secretary
must notify the holder in writing of his or her decision to suspend the tradex
order and the reasons for the suspension, and the date of effect of the
suspension. This notice may be included in the notice given by the Secretary
under clause 16.
Subclause (3) states a tradex
order that has been suspended is not in force for the period of the
suspension.
Subclause (4) allows the Secretary
to remove the suspension of the tradex
order.
Subclause (5) provides that written
notice of the removal of the suspension is to be given to the
holder.
Subclause (6) provides that the
suspension, or the removal of the suspension, by the Secretary, must be in
writing and takes effect on the date nominated in the instrument of suspension
or removal.
Subclause (7) provides that the
details of the suspension, or removal of the suspension, must be entered in the
Register.
Subclause (8) states that the
suspension ceases to have effect, if not sooner removed, if the tradex order is
revoked.
This clause provides that where the holder has requested
under clause 14 that a tradex order be revoked, the Secretary must as soon as
practicable after receipt of the request revoke the order, give the holder
written notice of the revocation and its date of effect, and amend the Register.
Subclause (1) requires the Secretary to revoke a tradex
order if the holder of the order has notified the Secretary under clause 15, or
if the Secretary has given to the holder written notice under clause 16 and the
holder does not satisfy the Secretary within the specified period of either of
the matters specified in subclause
(1)(b).
Subclause (2) provides that the
revocation must be in writing, signed by the Secretary and takes effect on the
date stated in the instrument of
revocation.
Subclause (3) provides that the
Secretary must provide to the holder written notice of his or her decision.
Subclause (4) provides that the notice must
state the date of revocation, set out the Secretary’s findings on material
questions of fact, refer to evidence or other material used as a basis for the
decision and provide reasons for the
decision.
Subclause (5) requires the Secretary
to amend the Register where a tradex order is revoked under clause
19.
This clause provides that where an individual holder dies,
or an incorporated holder ceases to exist, the Secretary must record such
occurrence in the Register.
The purpose of this Part is to outline the circumstances
in which the holder of a tradex order becomes liable to pay tradex duty. For
example, a holder may import goods that were originally intended to be exported
in accordance with the requirements of the Tradex Scheme, however, for whatever
reason (eg the export order is cancelled) the goods are ultimately sold in the
domestic market. In this circumstance, the holder becomes liable to pay tradex
duty.
Subclause (1) outlines the circumstances in which the
holder of an order becomes liable for the payment of tradex duty. These
circumstances are where, in respect of any of the nominated goods, the
goods:
• are consumed or used by the
holder in Australia;
• are disposed of by
the holder to another person in Australia for the purposes of being consumed, or
used by another person in Australia;
• do
not satisfy the requirements of the Drawback Regulations (except for goods
included in an exempt class under the tradex regulations);
or
• are not exported within one year
after importation, or within any further period allowed by the
Secretary.
Subclause (2) states that where any
of the circumstances specified in subclause (1) apply, the holder becomes liable
to pay tradex duty in respect of the
goods.
Subclause (3) defines the amount of
tradex duty to be an amount equal to the customs duty that would have been
payable on the goods at the time of importation if the goods had not been
subject to a tradex order.
Subclause (4) states
that tradex duty is payable within 28 days of the happening of whichever event
specified in this subclause is
applicable.
Subclause (5) provides that an
amount of tradex duty not paid within the period specified in subclause (4)
becomes a debt due to the Commonwealth and is recoverable by action in any court
of competent jurisdiction.
Subclause (6)
provides that a person continues to be liable to pay the tradex duty even if the
person is convicted of an offence or pays a penalty under Part 10 of the Act, in
respect of the failure to pay the amount.
The purpose of this Part is to specify the records that a
holder of a tradex order must keep in order to justify and substantiate the
holder's use of the Tradex Scheme.
Subclause (1) requires the holder of a tradex order to
keep the required records (see subclause (2)) or ensure that another person
keeps the required records on behalf of the holder, in accordance with clause
23.
Subclause (2) outlines the required records
that the holder must keep. These include records containing particulars
of:
• any incorporation of the goods into
other goods;
• the storage of the
goods;
• the consumption or use of the
goods in Australia by the holder;
• the
consumption or use of the goods in Australia by another
party;
• the exportation of the goods or
any goods in which they have been
incorporated;
• any payment of tradex
duty; and
• any other matters as
specified in the regulations.
Subclause (1) stipulates that the required records must be
kept at a place in Australia.
Subclause (2)
states that the required records are to be written in the English language or be
in a form (including an electronic form) that can be converted into
English.
Subclause (3) states that the required
records are to be kept for a period of 5 years after the last occasion on which
any act was done in relation to the goods by or at the request of the
holder.
The purpose of this Part is to outline the procedures
involved and the powers an authorised officer has to conduct audits under the
Act.
Subclause (1) states that an authorised officer may not
exercise his or her powers under clause 24 to enter premises except with the
consent of the occupier or under the authority of a monitoring warrant issued
under clause 25. Also, an authorised officer may not enter such premises if the
occupier has asked the officer to produce his or her identity card and the
officer has not complied with this
request.
Subclause (2) specifies the audit
powers that an authorised officer has in relation to a holder of a tradex order.
The authorised officer may:
• require the
holder to make available documents that are in his or her possession, or to
which the holder has access, and which are relevant to whether any disqualifying
circumstances exist;
• require the holder
to demonstrate the operation of record keeping or accounting systems used in
respect of the nominated goods;
• conduct
testing of the record keeping or accounting systems for
accuracy;
• subject to subclause (1),
enter premises the holder has indicated or documents inspected by the authorised
officer have indicated, that nominated goods have been, are, or may be
on;
• search on premises entered under
subclause 2(d) for any nominated goods, and to examine, open or retain samples
of any such nominated goods;
• examine
and/or make copies or take extracts from documents made available in accordance
with subclause 2(a), or found on the premises entered under subclause
2(d);
• require the holder or agent or
employee of the holder to answer questions concerning the matters specified in
subclause 2(g).
Subclause (3) requires the
holder of a tradex order to make available documents for examination under
subclause 2(a) by sending or giving certified copies of the documents to the
authorised officer, or by allowing the documents to be examined by the
authorised officer at any reasonable time at the premises where they are
kept.
Subclause (4) provides the occupier of
premises entered by an authorised officer under subclause (2)(d) must provide
the officer with all reasonable facilities for the effective exercise of the
officer’s powers.
Subclause (1) provides that an authorised officer may
apply to a magistrate for a monitoring
warrant.
Under subclause (2), a magistrate is
to issue a monitoring warrant where satisfied of the matters listed in that
subclause.
Subclause (4) provides that a
monitoring warrant must authorise the authorised officer named in a warrant to
enter the premises and exercise the powers contained in subclauses 24(2)(b),
(c), (e), (f), and (g), and must state the various matters mentioned in
subclauses 4(b), (c), and (d).
This Part outlines the range of offences that may arise
under the Tradex Scheme.
This clause provides that a holder of a tradex order is
guilty of an offence if he or she fails to notify the Secretary of any changes
to particulars entered in the Register as required under clause
9.
The maximum penalty for an offence against
clause 26 is 30 penalty units.
This clause provides that a holder of a tradex order is
guilty of an offence if he or she fails to give notice of his or her
ineligibility to apply for, or hold, a tradex order as required under clause
15.
The maximum penalty for an offence against
clause 27 is 30 penalty units.
Subclause (1) provides that a person is guilty of an
offence if he or she is liable to pay tradex duty under subclause 21(2) and the
person fails to pay the duty within the applicable period under subclause
21(4).
The maximum penalty for an offence
against clause 28 is an amount equal to the amount of the tradex duty that was
not paid within the specified period.
Subclause
(2) provides that an offence of this kind is an offence of strict
liability.
This clause provides that a person is guilty of an offence
if the person is required to keep records under clause 22 and the person fails
to do so.
The maximum penalty for an offence
against clause 29 is 30 penalty units.
Subclause (1) states a person will be guilty of an offence
if the person refuses or fails to comply with a requirement made by an
authorised officer that the
person:
• make available specified
documents (subclause 24(2)(a));
• demonstrate the operation of any
record-keeping or accounting systems used in relation to the nominated goods
(subclause 24(2)(b)); or
• answer any
questions about the nominated goods, or, relevant documents, or record keeping
or accounting systems (subclause 24(2)(g)).
The
maximum penalty for an offence against clause 30 is 60 penalty
units.
Subclause (2) states that a person is
not entitled to refuse to answer a question that he or she is required to answer
under subclause 24(2)(g) or make available documents under subclause 24(2)(a),
on the grounds that such action might tend to incriminate the
person.
Subclause (3) states, however, that any
answer or documents given are not admissible in evidence against the person in
any criminal proceedings (other than proceedings for an offence against Clause
32) or any civil proceedings.
This clause provides that the occupier of premises entered
by an authorised officer under subclause 24(2)(d) is guilty of an offence if the
occupier does not provide the authorised officer with all reasonable facilities
and assistance in the exercise of the officer’s powers
.
The maximum penalty for an offence against
clause 31 is 10 penalty units.
This clause provides that a person is guilty of an offence
if the person provides false or misleading answers or documents to the Secretary
or an authorised officer, and the person knows that the answer or document is
false or misleading.
The maximum penalty for an
offence against clause 32 is imprisonment for 12 months.
This Part provides the Secretary with the option of
issuing an infringement notice to a person if the Secretary believes that the
person has committed an offence against clause 28 (ie failure to pay tradex
duty). If the person pays any unpaid tradex duty, and the penalty specified in
the notice, within the required period (and provided the infringement notice has
not been withdrawn), any liability of the person for an offence against clause
28 is taken to be discharged, the person is not regarded as having been
convicted of an offence, and further proceedings cannot be taken in relation to
that offence.
This clause outlines the circumstances in which the
Secretary may issue an infringement notice on a person.
Subclause (1) outlines the matters that must be included
in an infringement notice.
Subclause (2) states
that the notice may contain any other matters the Secretary considers
necessary.
Subclause (3) provides that the
amount of the penalty that may be specified in the infringement notice is 20% of
the tradex duty that was not paid by the person on whom the notice is served,
within the period specified in subclause 21(4).
Subclause (1) provides that the Secretary may, by written
notice, withdraw an infringement notice within the period within which the
penalty was required to be paid.
Subclause (2)
provides a non-exhaustive list of matters the Secretary may take into account in
deciding whether or not to withdraw an infringement
notice.
Subclause (3) provides that where a
person has paid the penalty specified in the notice within the period required
in the notice, and the notice is subsequently withdrawn, the Secretary must
repay the person, out of moneys appropriated specifically for that purpose, an
amount equal to the penalty paid.
This clause provides that where an infringement notice is
served on a person (and has not been withdrawn), and the person has paid the
penalty specified in the notice and any unpaid tradex duty within the period
specified in the infringement
notice:
• any liability of the person for
the offence specified in the notice will be
discharged;
• no further proceedings can
be taken against the person for the offence;
and
• the person is not regarded as
having been convicted of the offence.
This clause states that only one infringement notice can
be served on a person for the same offence.
This clause confirms that Part 10 does
not:
• require an infringement notice to
be served for an offence against clause
28;
• affect the liability of a person to
be prosecuted for an offence against clause 28 where an infringement notice is
not served, or has been served but subsequently withdrawn under clause 35, or
where the person has failed to comply with the terms of the infringement notice;
or
• limit the amount of the penalty a
court may impose on a person convicted of an offence against clause
28.
Subclause (1) provides that an application may be lodged
(within 28 days of receipt of notice of the Secretary’s decision) with the
Secretary to reconsider a decision the Secretary has made under either clause 11
(refusal in whole or in part to grant an application for a tradex order) or
clause 13 (refusal in whole or in part to vary a tradex
order).
Subclause (2) provides that the holder
of a tradex order may apply to the Secretary (within 28 days of receipt of
notice of the Secretary’s decision) to reconsider a decision the Secretary
has made under either clause 17 (suspension of a tradex order) or clause 19
(revocation of a tradex order).
Subclause (3)
specifies the form and particulars to be included in an application for
reconsideration.
Under subclause (4), the
Secretary must record the day of lodgement of an application for
reconsideration.
Subclause (5) allows the
Secretary 28 days in which to make his or her decision on the application for
reconsideration.
The matters the Secretary
may have regard to in making his or her decision on an application for
reconsideration are set out in subclause (6).
If the Secretary fails to make a decision
within 28 days, the Secretary will be taken to have affirmed his or her original
decision (subclause (7)).
Subclause (8) states
that the Secretary must give to the applicant written notice of his or her
decision on an application for reconsideration under clause 39.
This clause provides that application may be made to the
Administrative Appeals Tribunal for a review of a decision made by the Secretary
under clause 39.
This clause deals with certain evidentiary matters
relevant to a hearing of a prosecution for an offence against clause
28.
This clause provides that if a cheque is tendered as
payment for all or part of any tradex duty, or as payment for all or part of any
penalty specified in an infringement notice, payment is not made unless and
until the cheque is honoured on presentation.
This clause allows for extension by the Secretary of the
periods set out in the clauses mentioned in subclause (4).
Subclause (1) states that the Secretary may approve forms
for purposes relating to the Act.
Subclause (2)
provides that the instrument by which a form is approved under subclause (1) is
a disallowable instrument for the purposes of section 46A of the Acts
Interpretation Act 1901.
Subclause (1) provides that the Secretary may appoint
persons to be authorised officers for the purposes of the
Act.
Subclause (2) provides that the Secretary
may issue an identity card to an authorised
officer.
Subclause (3) specifies the form and
matters to be recorded on an identity
card.
Subclause (4) provides that a person who
ceases to be an authorised office must, as soon as practicable, return his or
her identity card.
Subclause (5) provides that
a person is guilty of an offence if he or she fails to return his or her
identity card as required under subclause (4). The maximum penalty for an
offence against subclause (5) is 1 penalty
unit.
Subclause (6) provides that
“person” for the purposes of clause 45, means "an
individual".
This clause states, for the avoidance of doubt, that a
tradex order is not property that is transmissible by assignment, by contract,
by will or by operation of law.
This clause provides that Chapter 2 of the Criminal
Code applies to all offences against this Act.
This clause allows the Secretary to delegate all or any of
his or her functions or powers under the Act to an officer or person employed in
the Department.
This clause provides the Governor General may make
regulations prescribing all
matters:
(a) required or permitted to be
prescribed by the Act; or
(b) necessary or
convenient to be prescribed for carrying out or giving effect to the
Act.
This clause makes provision for persons, who were users of
the Tariff Export Concession (TEXCO) Scheme immediately before commencement of
the Act, to become holders of tradex orders. The Tradex Scheme replaces the
TEXCO scheme and this provision gives users of the TEXCO scheme the option to
become users of the Tradex Scheme.
This clause
states that if a person who immediately before commencement of the Act was a
user of the TEXCO Scheme, notifies the Secretary in writing before the
commencement of the Act that he or she wishes to continue importing goods of a
kind or description (that he or she had imported under the TEXCO Scheme), the
Secretary must make under section 11 such tradex order as would have been made
had the person made an application under clause 10.
The Tradex Scheme Bill 1999 sets out the
circumstances in which tradex duty becomes payable to the Commonwealth and the
process for recovering that duty. The Tradex Duty Imposition Bill 1999
imposes the liability to pay the tax (known as tradex duty).
This clause provides for the Bill, when enacted, to be
cited as the Tradex Duty Imposition Act 1999.
This clause provides that the Act commences on the same
day as the Tradex Scheme Act 1999.
This clause provides that the tax payable under section 21
of the Tradex Scheme Act 1999 is imposed by this clause under the name of
tradex duty
This clause provides that the Act does not impose a tax on property of any kind belonging to a State (having the same meaning as in section 114 of the Constitution).